India’s Market Rally Stalls Due to AI and Geopolitics: Expert Insights
A combination of artificial intelligence (AI) and global economics has stalled India’s progress amongst its emerging market peers, according to Ruchir Sharma, head of Rockefeller Capital Management’s international business. In an interview with NDTV’s Editor-In-Chief Rahul Kanwal, Sharma discussed the current state of the Indian stock market and the factors that are affecting its performance.
The Impact of AI on India’s Market Rally
Sharma noted that the global AI wave has complicated the outlook of India’s markets on the global stage. He stated that the big trade in the world in the last year has been the AI trade, and India has been seen as a bit of a loser in this. The feeling is that AI is going to take over a lot of jobs, making it much more difficult for countries to climb up the development ladder because so many jobs are going to be replaced by AI that could have been done by mid-level workers, whether it is BPO or other such industries.
For more information on how AI is impacting the Indian economy, visit our page on Artificial Intelligence in India.
The Role of Geopolitics in India’s Market Performance
Sharma also pointed to geopolitics and the trade tussle between India and the United States of America as a reason for the underperformance of Indian markets. The ongoing trade dispute with the US and the shifting tenor of US-China ties have altered India’s positioning. At one point in time, India was seen to be the favoured ally of the US, but now it finds itself in a bit of a box.
To learn more about the impact of geopolitics on the Indian stock market, check out our article on Geopolitics and the Indian Stock Market.
India’s Economic Performance and Market Outlook
Sharma noted that India has to look inward and work on its trade policies. India turned far too protectionist, but now needs to open more. The relationship with the EU and UK deal are good, but countries like Indonesia find it difficult to trade with India. He suggested that India needs to find out how to become a more open economy with countries that don’t have any agenda with India.
For an in-depth analysis of India’s economic performance and market outlook, visit our page on Indian Economic Performance and Market Outlook.
Conclusion and Future Outlook
Sharma resisted bleak forecasts, stating that India consistently disappoints pessimists. He believes that the country’s structural appeal remains intact relative to its emerging market peers, but the speed and breadth of AI adoption and India’s dynamics with the US will determine whether the market regains leadership.
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